FGV Audited Financial Statements 2019

42 FGV HOLDINGS BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Financial assets (continued) Impairment (continued) (i) Impairment for debt instruments and financial guarantee contracts (continued) a) General 3-stage approach for other receivables, loans due from intercompany and non-trade amounts due from intercompany At each reporting date, the Group measures ECL through loss allowance at an amount equal to 12 month ECL if credit risk on a financial instrument or a group of financial instruments has not increased significantly since initial recognition. For all other financial instruments, a loss allowance at an amount equal to lifetime ECL is required. The measurement details of ECL are disclosed in the relevant notes to the financial assets. b) Simplified approach for trade receivables, trade amounts due from intercompany and contract assets The Group applies the MFRS 9 simplified approach to measure ECL which uses a lifetime ECL for trade receivables and contract assets. The measurement details of ECL are disclosed in the relevant notes to the financial assets. The credit risk assessment basis and credit risk rating of the debt instruments are disclosed in Note 4(a) to the financial statements. (ii) Significant increase in credit risk The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportable forward-looking information.